On July 24, China released new policies on the education system as a part of countermeasures to the country’s declining birthrate, with the purpose of correcting excessive faith in academic background. The new reforms provide a broad range of restrictions including limitation of homework load for the first to ninth graders and business operation rules for private tutoring schools. In particular, the private tutoring sector is strictly controlled in such a way that no new tutoring business licenses are approved; existing tutoring schools need to become a non-profit corporation; and listing on the stock market is prohibited.

The stricter regulations are aimed at reducing the burden of education fee on households according to the general recognition that "soaring education expense to struggle for the fierce competition in school entrance exams is the major reason for being hesitant to have a second child."

The birthrate in China began to decline in parallel with the "one-child policy" that started in 1979, and resultingly, the working-age population showed the first decrease in 2014. The government authority abolished the one-child policy in the following year, nevertheless, the total fertility rate as of last year remained at the level of 1.3, which was lower than that of Japan, showing no signs of recovery. Concurrently, population aging has been accelerated. It is predicted that one-third of the total population, 450 million, will be the share of the elderly in 2050. Following these circumstances, population control measures were eased further in May with a slogan, "Up to three children per couple" to strengthen the efforts for the population growth. In fact, the current education reforms are considered to work as an extension of the demographic solution.

Meanwhile, in order to cope with the rapid decline in the working-age population, the vocational education law targeting vocational schools that are equivalent to high schools and universities respectively is also revised. Specifically, vocational training school graduates are certified as a high school or a university diploma recipient. The plan seeks to promote antidiscrimination rules in job finding, working conditions, and acquisition of urban registration. Besides, it is intended to correct the elite-oriented academic supremacism and shift human resources toward the manufacturing sector, where a labor shortage is becoming extremely serious. In addition, private companies are encouraged to make an investment and participate in the management of the manufacturing sector. That is the way to maintain the foundation of the domestic manufacturing industry through the integrated function of industry-government-academia collaboration.

We might say forceful implementation of strategies imply typical Chinese techniques, however, their effectiveness as countermeasures against the declining birthrate is yet to be known, and one wrong step may lead to lack of dynamism of society. China's economic growth has partly been driven by people’s constant desire for advancement that is cultivated since their childhood. Besides, better wages for workers at manufacturing sites will naturally become a factor for cost rises. In other words, it is reasonable to say that the latest reformation is designed for changes from the existing requirements for strong competitiveness. Also, we can interpret it as a complementary measure to assist the "dual-cycle" strategy that places a primary emphasis on the domestic development circulation while maintaining international competitiveness. If that viewpoint is correct, success or failure of the Chinese version of “Relaxed Education” should be assessed collectively with the improvement of productivity based on domestic demand as well as the realization of domestic disparity adjustment. The bottom line is, a perspective gained from a single issue of a declining birthrate, will miss the essence of the matter.

This Week’s Focus, July 30

Takashi Mizukoshi, the President